The Owners - Strata Plan No 66375 v King

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Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: The Owners – Strata Plan No 66375 v King [2018] NSWCA 170
Hearing dates: 5 and 6 April 2018
Decision date: 03 August 2018
Before: Ward JA at [1];
Leeming JA at [335];
White JA at [388]
Decision:

1. Allow the appeal.
2. Set aside the orders made by Ball J as between the Owners Corporation (the appellant in these proceedings) and David and Gwendoline King (the respondents in these proceedings) and in lieu thereof order that judgment be entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs.
3. Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW), if applicable.

Catchwords:

BUILDING AND CONSTRUCTION – claim by owners corporation against persons alleged to be “developers” as defined by Home Building Act 1989 (NSW) s 3A – question of fact as to whether alleged “developers” were parties to building contract

 

APPEALS – drawing of inferences on appeal – evaluation of competing inferences – where primary judge failed to draw inference that respondents were parties to the building contract

BUILDING AND CONSTRUCTION – whether developers liable for “design defects” – statutory construction of Home Building Act 1989 (NSW) ss 18B and 18C – scope of notional contract pursuant to s 18C – whether breach of statutory warranty pursuant to s 18B(c)
Legislation Cited: Building Services Corporation Legislation Amendment Act 1996 (NSW), Sch 1
Building Services Corporation Legislation Amendment Bill 1996 (NSW)
Environmental Planning and Assessment Act 1979 (NSW) ss 76A(1), 81A, 122, 123, 125
Environmental Planning and Assessment Amendment Regulation 1998
Environmental Planning and Assessment Amendment Regulation 1999
Environmental Planning and Assessment Regulation 1994 (NSW), cll 78A, 79E, 79G
Evidence Act 1995 (NSW), ss 69, 87
Home Building Act 1989 (NSW), ss 3, 3A, 6, 7, 7A, 7B, 10, 18A, 18B, 18C, 18D, 18E, 18F, 18G, Sch 4 cl 107
Home Building Amendment Act 2011 (NSW), Sch 1 cll 1, 2, 3, 31
Home Building Regulation 1997 (NSW), cl 8
Interpretation Act 1987 (NSW), s 33
Strata Schemes (Freehold Development) Act 1973 (NSW), s 11
Strata Schemes Management Act 1996 (NSW), s 8
Suitors’ Fund Act 1951 (NSW)
Supreme Court Act 1970 (NSW), ss 75A(5), 101
The Contractors’ and Workmen’s Lien Acts 1906 to 1921 (Qld), ss 4, 6, 9, 10, 19
Uniform Civil Procedure Rules 2005 (NSW), r 51.53
Cases Cited: Ace Woollahra Pty Ltd v The Owners – Strata Plan No 61424 (2010) 77 NSWLR 613; [2010] NSWCA 101
Atkinson v Crowley [2011] NSWCA 194
Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140
Baron Corporation Pty Ltd v Owners of Strata Plan 69567 [2013] NSWCA 238
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47
Chan v Acres [2015] NSWSC 1885
Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160
Dilosa v Latec Finance Pty…
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Details
Case
[2018] NSWCA 170
Decision Date

CaseChat Overview and Summary

The Owners - Strata Plan No 66375 (the appellant) brought proceedings against David and Gwendoline King (the respondents), alleging they were "developers" within the meaning of the *Home Building Act 1989* (NSW) and therefore liable under that Act. The central dispute concerned whether the Kings were parties to a building contract, which would establish their status as developers.

The Court of Appeal was required to determine whether the primary judge erred in failing to draw the inference that the respondents were parties to the building contract. Further, the court had to consider the statutory construction of sections 18B and 18C of the *Home Building Act 1989* (NSW) to ascertain the scope of the notional contract created by section 18C and whether the Kings had breached a statutory warranty under section 18B(c) concerning "design defects".

The Court of Appeal found that the primary judge had erred in not inferring that the Kings were parties to the building contract, thereby establishing them as developers. The court reasoned that the evidence, when viewed holistically, supported the conclusion that the Kings had entered into the contract. Consequently, the court held that the Kings were liable for breaches of statutory warranties, including those relating to design defects, as contemplated by the *Home Building Act 1989* (NSW).

The appeal was allowed, the orders of the primary judge were set aside, and judgment was entered in favour of the Owners Corporation against the Kings for the sum of $5,093,168.08, together with costs. The respondents were also granted a certificate under the *Suitors’ Fund Act 1951* (NSW), if applicable.

Orders

Orders of the court

1. Allow the appeal.

2. Set aside the orders made by Ball J as between the Owners Corporation (the appellant in these proceedings) and David and Gwendoline King (the respondents in these proceedings) and in lieu thereof order that judgment be entered in favour of the Owners Corporation against the Kings in the sum of $5,093,168.08, with costs.

3. Grant the respondents a certificate under the Suitors’ Fund Act 1951 (NSW), if applicable.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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